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Digital Brands Group

A curated group of digital-first lifestyle brands that is redefining retail and the customer experience through a shared resources model.

Digital Brands Group is offering securities through the use of an Offering Statement that has been qualified by the Securities and Exchange Commission under Tier II of Regulation A. A copy of the Final Offering Circular that forms a part of the Offering Statement may be obtained both here and below. The contents of the Highlights, Term Sheet sections have been prepared by SI Securities, LLC and shall be deemed broker-dealer communications subject to FINRA Rule 2210 (the “Excluded Sections”). With the exception of the Excluded Sections noted above, this profile contains offering materials prepared solely by Digital Brands Group without the assistance of SI Securities, and not subject to FINRA Rule 2210 (the “Issuer Profile”). The Issuer Profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its industry. These statements reflect management’s current views with respect to future events based on information currently available and are subject to risks and uncertainties that could cause the company’s actual results to differ materially. Investors are cautioned not to place undue reliance on these forward-looking statements as they are meant for illustrative purposes and they do not represent guarantees of future results, levels of activity, performance, or achievements, all of which cannot be made. Moreover, no person nor any other person or entity assumes responsibility for the accuracy and completeness of forward-looking statements, and is under no duty to update any such statements to conform them to actual results.

Digital Brands Group is a curated collection of digital-first lifestyle brands that is redefining retail and the customer experience. The Group's purpose is to develop each of its brands through shared resources that support and market their products while maintaining and creating their unique customer values and identities.

Our company was first founded in 2012 as Denim.LA, LLC and specialized in crafting and selling premium essentials directly to the consumer. We launched our first brand, DSTLD (‘distilled’) in 2014 with an emphasis on luxury-grade denim, t-shirts, leather jackets, outerwear, and other high quality everyday essentials no one can live without. Due to the popularity of DSTLD, growing demand from its 70k+ customer base, and the success of two prior Regulation A+ financing rounds, we saw an opportunity to evolve the Denim.LA brand into Digital Brands Group, a portfolio of digital-first lifestyle brands.

Digital Brands Group's (DBG) strategy is to create a portfolio of digital-first lifestyle brands that share operational, infrastructure, and data resources as means to drive down redundant fixed costs that are difficult to establish and expensive to maintain. By forming a shared resources model of curated vertical commerce (v-commerce) labels, each of which bring a unique set of products, values, and engaged customers to DBG, we're able to scale multiple brands under one umbrella and create a business that is exponentially larger than any one single brand.

DSTLD (pronounced 'distilled') has previously completed two Regulation A+ rounds with SeedInvest, raising over $4.6M from more than 3,400 investors. DSTLD was DBG's first portfolio company and recently surpassed $15M in revenue from more than 71.9K customers.

Pitch Deck

Product & Service

We believe our strategy for Digital Brands Group will position us to thrive in today’s market by providing digitally native vertical brands (DNVBs) affordable, data-driven shared resources to optimize and scale their businesses. Sharing services (ie: manufacturing, fulfillment, marketing, accounting and legal, customer service) drives down any one brand's fixed costs and frees up cash flow to be reinvested in key areas, like better raw materials, new production partners, innovative production techniques, sales / marketing channels, and operating income.

DBG is focused on both building and acquiring digital-first brands for two primary reasons:

E-commerce and direct-to-consumer are driving revenue growth and market share (see slide 5 of deck). We have an established tech stack with proven competency for digital marketing, consistently achieving 2-3x ROA.

DNVBs have multiple distribution opportunities: Online, Showrooms, and strategic 3rd parties (see slide 7 of deck). Showrooms or limited inventory storefronts have become a core part of our customer acquisition and retention strategy. Between our New York City and Los Angeles locations, we're seeing 12% higher LTV and 72% lower returns with our first-time retail customers.

Our target customer is the digitally native Millennial and Gen X consumer, an under marketed segment, of which 68% demand an omni-channel shopping experience. This customer values above all: transparency, quality, and value. As such, all DBG brands are required to meet not just specific financial requirements to join the Group, but also embrace the ideals crucial to the Millennial and Gen X value system.

DBG is currently comprised of two brands (and having meaningful conversations with a handful of potential acquisition targets):

DSTLD | Premium Denim + EssentialsDSTLD launched in 2014 under the premises that ethically produced, well-crafted clothing shouldn’t cost so much, and that Fast Fashion is an excessive and unsustainable industry. Inspired by the creatives that constitute Los Angeles (filmmakers, writers, entrepreneurs, artists, and designers), DSTLD set out to build a contemporary brand based on the modern uniform they saw around them: Jeans, t-shirts, and other luxury-level basics that no person can live without.

DSTLD at a glance:

$15M+ Lifetime Sales

149% Compounded Annual Growth Rate; 79% YoY Sales Growth

71.9k+ Lifetime Customers

DSTLD customers have a 2.1x customer acquisition payback after just 12 months.

ACE Studios | Performance Suiting + Luxury Sportswear (launching December 2018)ACE Studios is a luxury menswear brand that believes in performance, fit, and quality at a a fair value. We work with centuries old Italian mills and European factories to produce premium menswear that’s grounded in tradition, focused on innovation and performance-forward raw materials, and offered at an exceptional value. Launching in December 2018 with a collection of performance tees, dress shirts, a suit jacket, and slacks.

Suits utilize Impact Zero fabric, a sustainable wool that’s specially woven with stretch for ease of movement. Impact Zero fabric is water-repellent, anti-wrinkle, odor-free, and thermoregulated. Its development requires only one-third of the water normally used to create traditional wool fabrics and removes harsh chemicals from the process all together.

Suits and dress shirts will be offered in Slim and Tailored fits to start.

WHAT THE PRESS IS SAYING

"The Best Figure Flattering Denim" VOGUE

"A pair of premium, quite perfectly cut jeans." GQ

"Meet the denim company that will change your life (and wardrobe) for good." AOL

"The DSTLD team has developed incredible fit technology that emphasizes 'body-mapping'." ELLE

"I can truly say that the style hugged my curves in all the right places." PopSugar

CUSTOMER AND INVESTOR FEEDBACK

"The first time I tried on my DSTLD jeans, I was immediately hooked by the quality, fit, and convenience. I have yet to find a pair of jeans thats fits better." Wesley T. | Investor | Customer since December 2015

"DSTLD is taking the art of style and simplicity to a whole other level." David | Investor | Customer since May 2015

"They are the most comfortable and soft jeans I've encountered. An absolutely fabulous job on the jeans, one can see and feel the quality that has gone into them." Garrett M. | Customer since September 2015

"Great quality jeans. I never thought I'd find a pair that I love as much as my AG jeans, but these have surpassed my expectations. The skinny Black Powerstretch pair is my favorite -- great stretch without it loosening up too much and giving a baggy butt look. After several washes the black has not faded at all. Customer service is superb." Christina O. | Customer since November 2014

"Your jeans are simply the best and I want more." Shea L. | Customer since September 2015

"A unique product line that stands out above the rest with quality and design. " Andy B. | Investor | Customer since May 2016

"The clothing industry is ripe for re-imagination and DSTLD is forging that path." Joe C. | Investor | Customer since October 2014

"In an industry where fast fashion dominates, it's refreshing to have a brand that's focused on providing stylish, high-quality and affordable clothing." John P. | Investor | Customer since September 2016

*Disclaimer: The above individuals were not compensated in exchange for their testimonials. In addition, their testimonials should not be construed as and/or considered investment advice.

Gallery

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Media Mentions

Team Story

Our leadership team has been on the forefront of the direct-brand revolution the last 10 years, co-founding a handful of direct-to-consumer brands (Winc, J. Hillburn, BeautyKind, DSTLD).

Founders and Officers

Mark T. Lynn is an Irish born, LA based entrepreneur with a keen interest in design and technology. He is the Co-Founder and Co-CEO of DSTLD where his example-driven leadership shapes the atmosphere. In his 15 years as an entrepreneur he has been involved in several successful companies across a wide variety of verticals, including boutique hotels, design-driven real estate development, and wine and spirits. Prior to co-founding DSTLD with Epstein, Lynn co-founded WINC (www.winc.com), a subscription based e-winery.

Lynn enjoys modern art, classical, and house music (in equal measure), traveling, wine, and a good pint of Guinness.

Mark Lynn

CO-FOUNDER, CHAIRMAN, PRESIDENT OF M&A AND STRATEGIC PARTNERSHIPS

Mark T. Lynn is an Irish born, LA based entrepreneur with a keen interest in design and technology. He is the Co-Founder and Co-CEO of DSTLD where his example-driven leadership shapes the atmosphere. In his 15 years as an entrepreneur he has been involved in several successful companies across a wide variety of verticals, including boutique hotels, design-driven real estate development, and wine and spirits. Prior to co-founding DSTLD with Epstein, Lynn co-founded WINC (www.winc.com), a subscription based e-winery.

Lynn enjoys modern art, classical, and house music (in equal measure), traveling, wine, and a good pint of Guinness.

Corey Epstein is the Co-Founder, Co-CEO, and Creative Director of DSTLD, leading his team in the day to day operations of the company as well as guiding the broader creative vision for the brand. There’s no typical day for Corey – you might find him at table intently tweaking code or on the floor, camera in hand, snapping the perfect photo. He established a talent for executing a concept and creating a mood early on. Prior to founding DSTLD, Corey led his own marketing and web consulting firm where he advised hundreds of clients across all industries on branding, design, development, and strategy. Later, he served as a Senior Consultant at Deloitte, specializing in Retail Strategy and Analytics. He holds a BBA from Loyola Marymount University with a focus in Business Law and earned his MBA from UCLA Anderson School of Management.

He always finds a way to combine what he loves most – music, art, and photography – with work. In his free time, Corey enjoys hiking, playing guitar, and honing his skills behind the lens.

Corey Epstein

CO-FOUNDER, CMO, CREATIVE DIRECTOR

Corey Epstein is the Co-Founder, Co-CEO, and Creative Director of DSTLD, leading his team in the day to day operations of the company as well as guiding the broader creative vision for the brand. There’s no typical day for Corey – you might find him at table intently tweaking code or on the floor, camera in hand, snapping the perfect photo. He established a talent for executing a concept and creating a mood early on. Prior to founding DSTLD, Corey led his own marketing and web consulting firm where he advised hundreds of clients across all industries on branding, design, development, and strategy. Later, he served as a Senior Consultant at Deloitte, specializing in Retail Strategy and Analytics. He holds a BBA from Loyola Marymount University with a focus in Business Law and earned his MBA from UCLA Anderson School of Management.

He always finds a way to combine what he loves most – music, art, and photography – with work. In his free time, Corey enjoys hiking, playing guitar, and honing his skills behind the lens.

Hil came to DBG in March 2018 with a substantial background in e-commerce and luxury apparel. In 2007, he founded J. Hilburn, a made-to-measure men's apparel brand that he built into a $55 million dollar company in just six years. Most recently, he founded the e-commerce beauty and charitable venture, Beautykind, where he served as CEO, CFO, and Chairman of the board.

Prior to working in e-commerce, Hil held positions as an equity research analyst covering consumer and luxury publicly traded stocks at Thomas Weisel Partners, SunTrust, and Citadel Investment Group. He was also Head of Investor Relations at Brinker International, a $2.9 billion market capitalization restaurant company that owns Chili’s.

Hil Davis

CEO

Hil came to DBG in March 2018 with a substantial background in e-commerce and luxury apparel. In 2007, he founded J. Hilburn, a made-to-measure men's apparel brand that he built into a $55 million dollar company in just six years. Most recently, he founded the e-commerce beauty and charitable venture, Beautykind, where he served as CEO, CFO, and Chairman of the board.

Prior to working in e-commerce, Hil held positions as an equity research analyst covering consumer and luxury publicly traded stocks at Thomas Weisel Partners, SunTrust, and Citadel Investment Group. He was also Head of Investor Relations at Brinker International, a $2.9 billion market capitalization restaurant company that owns Chili’s.

Kevin is a businessman who joined DSTLD in July 2014 as CFO and COO (Kevin recently ceded the latter responsibilities). A native Californian, Kevin earned his BS in Applied Mathematics and Computer Science from the University of California, Berkeley. Upon graduation, he worked at Deloitte Consulting where he specialized in technical integrations and strategy. Kevin then went on to earn his MBA from UCLA Anderson in 2011. After earning his MBA, he worked for American Airlines as the Head of Pricing Strategy for Ancillary Products and for the airline’s Asia-Pacific network. With a strong desire to work in the apparel industry, Kevin left American Airlines and joined an Adidas licensee as their Vice President of Sales, overseeing the global sales and marketing strategy for multiple adidas sports categories.

At DSTLD, Kevin works closely with the product, marketing, and operations teams, closely budgeting and monitoring the optimized allocation of resources.

Kevin Morris

CO-FOUNDER, CFO, COO

Kevin is a businessman who joined DSTLD in July 2014 as CFO and COO (Kevin recently ceded the latter responsibilities). A native Californian, Kevin earned his BS in Applied Mathematics and Computer Science from the University of California, Berkeley. Upon graduation, he worked at Deloitte Consulting where he specialized in technical integrations and strategy. Kevin then went on to earn his MBA from UCLA Anderson in 2011. After earning his MBA, he worked for American Airlines as the Head of Pricing Strategy for Ancillary Products and for the airline’s Asia-Pacific network. With a strong desire to work in the apparel industry, Kevin left American Airlines and joined an Adidas licensee as their Vice President of Sales, overseeing the global sales and marketing strategy for multiple adidas sports categories.

At DSTLD, Kevin works closely with the product, marketing, and operations teams, closely budgeting and monitoring the optimized allocation of resources.

Term Sheet

Fundraising Description

Key Terms

Security Type:

Preferred Equity

Share price:

US $0.5300

Pre-money valuation:

US $35,000,000

Option pool:

0.74%

Is participating?:

False

Liquidation preference:

1.0x

Additional Terms

Closing conditions

SI Securities, LLC has the authority to prevent a closing from occurring if it determines, in its sole discretion, that this investment is no longer suitable at the time of the closing, which includes, but is not limited to, the Company raising at least US $399,999.48 in connection to the current round.

Custody of Shares

Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.

Use of Proceeds

Investor Perks

New Limited-Time Investor Perk

Any investor who invests before December 23rd will receive a $250 store credit that can be redeemed with any online purchase on DSTLD.com. (note this perk is retroactive to all investors who have invested in this Series A-3 round). Your credit will be granted after your investment is closed, however investors are eligible to receive this specific perk ahead of closing by emailing hannah@dstld.la with a copy of your SeedInvest investment confirmation email, and requesting access to the $250 credit. All other offered perks will be granted only once your investment has been closed.

All Investors:

Investor Portal with realtime metrics and updates

VIP Customer Service

Monthly Newsletter

Exclusive promotions, offers, events, and access to DBG brands

It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.

Prior Rounds

The graph below illustrates the valuation cap or the pre-money valuation of Digital Brands Group's prior rounds by year.

This chart does not represent guarantees of future valuation growth and/or declines.

Seed

Round Size

US $5,000,000

Closed Date

Feb 11, 2014

Security Type

Preferred Equity

Pre-money Valuation

US $9,000,000

Series A

Round Size

US $1,760,000

Closed Date

Mar 31, 2017

Security Type

Preferred Equity

Pre-money Valuation

US $22,000,000

Other

Round Size

US $2,966,000

Closed Date

Mar 23, 2018

Security Type

Preferred Equity

Pre-money Valuation

US $30,000,000

Bridge

Round Size

US $951,000

Closed Date

May 31, 2016

Security Type

Convertible Note

Valuation Cap

US $15,000,000

Market Landscape

Over the past 10 years, there has been a significant shift in the retail landscape. More than 8,600 U.S. retail stores shuttered in 2017. What's more is online sales in the United States are expected to reach $523 billion in the next five years, up 56% from $335 billion in 2015.

Since 2010, the retail landscape has undergone an undeniable shift away from traditional brick and mortar stores toward digital-first and direct-to-consumer brands (DtC), and the shift in consumer preferences already shows in the GDP. In 2016 direct sales contributed 6% ($1.12T) to the US economy, up from 3.7% in 2012.

Since 2012, investors have put nearly $2.5B into direct-to-consumer brands in design and apparel. Innovation-led growth is now driven by the smaller direct-to-consumer brands that are slowly picking apart the gradual-to-adapt big brands, filling the vacuum traditional retail is leaving behind.

Two-thirds of today’s consumer expects to directly connect with the brands they’re passionate about and demand brands tout a compelling mission, transparency, exceptional quality at a fair value, and and an unparalleled customer experience; this is where we maintain a competitive edge in the market. Digital Brands Group is able to meet each of these criteria through owning their customer data and shopping experience from start to finish.

Risks and Disclosures

The company’s auditor has issued a going concern opinion.

Our auditor has issued a “going concern” opinion on the company’s financial statements. The Company lacks liquidity to satisfy obligations as they come due, and only had positive working capital of $55,008 as of December 31, 2017 and had a working capital deficit of $1,395,579 as of December 31, 2016.

We are a new entrant to the clothing industry.

We first organized as a company in September 2012 (as Denim.LA, LLC). As such, we are a new entrant to the clothing industry and do not have the same brand awareness and customer base as other players in the market space.

Our results of operations are subject to variable influences and intense competition.

Our company is sensitive to changes to in consumer spending patterns, consumer preferences, and overall economic conditions. We are also subject to fashion trends affecting the desirability of our products. In addition to competing with other direct-to-consumer clothing and apparel companies, we face competition from a broad range of retailers, many of which have greater financial resources than we do.

New competitors may enter the market.

We operate in an established market space that regularly sees the entrance of new competitors. New competitors may copy our business model and provide an expanded range of products at a lower cost, targeting the same customer base, which may force us to cut prices and decrease our margins.

Competitors may be able to call on more resources than us.

While we believe that the company is unique, there may be other ways to deliver luxury denim and clothing products without the use of middlemen and retail establishments. Additionally, competitors may replicate our business ideas and produce directly competing products. These competitors may be better capitalized than we are, which would give them a significant advantage. This would particularly be the case if a major clothing manufacturer or retailer were to enter the market.

We may not be able to fully exploit newly acquired brands or released brands.

In the apparel industry, differing brands are used to reach different market segments and capture new market share. However, not every brand deployment is successful. We may incur significant costs acquiring, developing, and promoting new brands only to have limited market acceptance and limited resulting sales. If this occurs, our financial results may be negatively impacted and we may determine it is in the best interest of the company to no longer support that brand.

Our success depends on our ability to design and manufacture products that appeal to our customers.

It is possible that future new products will fail to gain market acceptance for any number of reasons. If the new products fail to achieve significant sales and acceptance in the marketplace, this could materially and adversely impact the value of your investment.

We may not be able to respond to changing fashion trends.

Our company is sensitive to changes in consumer preference, fashion trends, and the fashion business environment. If we are unable to respond to changes in the business environment and fashion trends it may result in our brands no longer being accepted in the marketplace.

We are subject to seasonal buying patterns.

We experience seasonal fluctuations in our net sales and net income associated with the clothing and apparel industry. Our quarterly results of operations may also fluctuate significantly as a result of a variety of factors, including the timing of new products and marketing pushes.

We depend on a small management team.

We depend on the skill and experience of four individuals, Corey Epstein, Mark Lynn, Kevin Morris, and Hil Davis. Each has a different skill set. If we are not able to call upon one of these people for any reason, our operations and development could be harmed.

We may not be able to successfully implement growth.

We depend on our ability to scale customer acquisition while maintaining an acceptable customer acquisition cost while successfully implementing any growth or strategic plans. If we are unable to scale customer acquisition at an acceptable cost, we may not be able to successfully increase our customer base.

If we cannot raise sufficient funds, we will not succeed.

We are offering Series A3 Preferred Stock in the amount of up to $15,900,000 in this offering on a best-efforts basis and may not raise the complete amount. Even if the maximum amount is raised, we are likely to need additional funds in the future in order to grow, and if we cannot raise those funds for whatever reason, including reasons relating to the company itself or to the broader economy, the company may not survive. If we raise a substantially lesser amount than the Maximum Raise, we will have to find other sources of funding for some of the plans outlined in “Use of Proceeds.”

There is no current market for any shares of the company's stock.

There is no formal marketplace for the resale of the Series A3 Stock or any of the company’s Preferred Stock. Shares of Series A3 Preferred Stock may be traded on the over-the-counter market to the extent any demand exists. Investors should assume that they may not be able to liquidate their investment for some time, or be able to pledge their shares as collateral.

We will incur increased costs if we decide to become a publicly-traded company.

If we decide to list our shares on a public exchange, we will incur additional legal, accounting, and other expenses not presently incurred. These expenses would result from increased public reporting requirements, new accounting practices that we may be required to adopt, and additional corporate governance requirements. Some of these costs could be reduced should we decide to have our shares quoted on the OTCQX operated by OTC Markets Group, or the Alternative Investment Market (AIM) in London. Nevertheless, the rules and regulations of being publicly quoted or listed on an exchange will increase our legal and financial compliance costs.

If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our stock, then our stock price and trading volume could decline.

The trading market for our stock will be influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price could be adversely affected. As a small-cap company, we are more likely than our larger competitors to lack coverage from securities analysts. In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock, our stock price could decline.

The Series A3 Preferred Stock is non-voting; voting control is in the hands of a few large stockholders.

The Series A3 Preferred Stock we are offering is non-voting, so investors in this offering, whether they purchase the minimum of 2,830 shares or over 100,000 shares, will not be able to influence our policies or any other corporate matter, including the election of directors, changes to our company’s governance documents, expanding the employee option pool, and any merger, consolidation, sale of all or substantially all of our assets, or other major action requiring stockholder approval.

Investors must consent to jurisdiction in California.

Section 6 of the subscription agreement for this Offering requires investors to consent to the jurisdiction of any state or federal court of competent jurisdiction located within the State of California. As a result, investors located outside the State of California may have difficulty bringing a legal claim against us due to geographic limitations.

We could be hacked.

Hackers and/or data breaches could lead to material financial losses, reputational damage, and legal expenses. Credit card processors could refuse to do business with us if we were to receive a large number of chargebacks, which can be triggered by fraudulent use of stolen credit cards. We do security audits; we do not store credit card information; we do our best to safeguard our systems and assets but we cannot guarantee that we will be able to successfully repel future attempts to defraud us or hack into our customers’ data.

We rely on our third-party logistics company.

All of our product is stored and shipped out of our third-party logistics provider, Newgistics. If there was a catastrophic event that resulted in a facility shut down or damaged goods, we would be unable to ship orders for a period of time. Additionally, we may be forced to renegotiate our contract and our rates, which could hamper our gross margin and potentially force us into searching for a new warehousing and fulfilment partner.

Our space is crowded and there are many competitors for share-of-wallet.

While apparel is very large industry it is also very fragmented. Competitors may be better capitalized than us and outspend us, which would give them a significant advantage.

We rely on third party manufacturers and vendors, some of whom are outside the United States.

Our products are primarily produced by, and purchased or procured from, independent manufacturing contractors located mainly in countries in North America, Europe and Asia. A manufacturing contractor’s failure to ship products to Digital Brands Group in a timely manner or meet the required quality standards could cause us to miss the delivery date requirements of our customers for those items. Due to our overseas production, which in some product categories is more than 75% of total, our business is subject to the following risks:

● political and economic instability in countries, including heightened terrorism and other security concerns, which could subject imported or exported goods to additional or more frequent inspections, leading to delays in deliveries or impoundment of goods;

● imposition of regulations and quotas relating to imports, including quotas imposed by bilateral textile agreements between the United States and foreign countries;

● imposition of increased duties, taxes and other charges on imports;

● significant fluctuation of the value of the dollar against foreign currencies;

● labor shortages in countries where contractors and suppliers are located;

● a significant decrease in availability or an increase in the cost of raw materials;

● restrictions on the transfer of funds to or from foreign countries;

● disease epidemics and health-related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas;

● increases in the costs of fuel, travel and transportation;

● increases in manufacturing costs in the event of a decline in the value of the United States dollar against major world currencies, particularly the Mexican Peso and Chinese Yuan, and higher labor costs being experienced by our foreign manufacturers in Mexico and China;

If these risks limit or prevent us from selling or manufacturing products in any significant international market, prevent us from acquiring products from foreign suppliers, or significantly increase the cost of our products, our operations could be seriously disrupted until alternative suppliers are found or alternative markets are developed, which could negatively impact our business.

Recently imposed tariffs and countervailing actions may increase our cost of goods or result in delay to delivery.

Recent trade disputes between the United States and its traditional trading partners Mexico and China may result in increased cost of goods for our products. Due to our focus on maintaining product prices for customers, we may be required to absorb those increased costs, resulting in lower gross profits. Additionally, even without tariff duties impacting our cost of goods, our products may be subject to increased inspection or delays as retaliatory measures are taken by foreign governments.

Uncertainty with respect to US trade policy may reduce our manufacturing choices and add to our expenses.

Most of the suppliers of raw materials and/or manufacturers of our products are not in the United States. The current US President indicated a desire to re-negotiate trade deals and impose tariffs on materials and products manufactured in foreign countries, including China and Mexico. We may incur additional expenses if we are forced to base our manufacturing in the United States.

Fluctuations in the price, availability and quality of raw materials could cause delays and increase costs and cause our operating results and financial condition to suffer.

Fluctuations in the price, availability and quality of the fabrics or other raw materials, particularly cotton, leather, and synthetics used in our manufactured apparel, could have a material adverse effect on cost of sales or our ability to meet customer demands. The price and availability of the raw materials and, in turn, the fabrics used in our apparel may fluctuate significantly, depending on many factors, including crop yields, weather patterns, labor costs and changes in oil prices. If prices increase, we may not be able to pass these costs onto our customers, due to our competitive price point. This could result in lower gross margins and could have a significant adverse effect on our business, financial condition, and operating results. Delays in availability and delivery of raw materials could result in delays of product deliveries, potentially causing decreased sales and financial performance.

Hindsight may prove that an acquisition may not have been on favorable terms to the company.

Our goal with any future acquisition is that any acquired brand should be able to contribute neutral to positive EBITDA to the holding company after integration and the cost savings that are generated. To effect these acquisitions, we will likely be required to obtain lender financing or issue additional shares of stock in exchange for the shares of the target entity. If the performance of the acquired brand to does not produce positive results for the company, the terms of the acquisition, whether it is interest rate on debt, or additional dilution of stockholders, may prove detrimental to the financial results of the company, or the performance of your particular shares.

SI Securities, LLC owns warrants in Denim.LA, Inc.

SI Securities, LLC owns warrants for the purchase of 243,096 shares of Series A Preferred Stock (subject to adjustments) and 296,637 shares of Series A-2 Preferred Stock (subject to adjustments) and may have interests that conflict with those of investors in Denim.LA, Inc. These warrants were received in connection with prior offerings for which SI Securities, LLC served as placement agent. Assuming the warrants are fully exercised and only the minimum amount of Series A-3 Preferred Stock is sold in this offering, SI Securities, LLC would have 0.81% total ownership in Denim.LA, Inc. on a fully diluted basis.

General Risks and Disclosures

Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.

Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.

The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events through continuing disclosure that you can use to evaluate the status of your investment.

Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.

Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.

Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.

Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC (“SI Advisors”). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. (“SI Selections Fund”). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.

Digital Brands Group's Offering Circular

The offering circular is the legal document filed with the SEC for a Regulation A offering and provides facts that an investor needs to make an informed investment decision. The offering circular includes an overview of company and company's business, historical financials and capitalization, and key risk factors.

Frequently Asked Questions

About Reg A Offerings

What does it mean that the SEC has qualified this offering?

"The SEC has qualified this offering" means the SEC has permitted Digital Brands Group to offer for sale the
securities described in the Offering Circular to investors such as you. The SEC is not judging the merits, accuracy,
or completeness of the offering and information in the Offering Circular. Rather, the SEC is merely ensuring
Digital Brands Group has met all legal disclosure and regulatory requirements necessary to make these securities available to you.

Making an Investment in Digital Brands Group

How does investing work?

When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an
independent escrow agent will watch over your investment until it is accepted by Digital Brands Group. Once
Digital Brands Group accepts your investment, and certain regulatory procedures are completed, your money will
be transferred from the escrow account to Digital Brands Group in exchange for your securities. At that point, you
will be a proud owner in Digital Brands Group.

What is the difference between preferred equity and a convertible note?

Preferred equity is usually issued to outside investors and carries rights and conditions that are
different from that of common stock. For example, preferred equity may include rights that prevent or minimize the
effects of dilution or grants special privileges in situations when the company is sold.

A convertible note is a unique form of debt that converts into equity, usually in conjunction with a future financing round. The investor effectively loans money to a startup with the expectation that they will receive equity in the company in the future at a discounted price per share when the company raises its next round of financing.

To make an investment, you will need the following information readily available:

Personal information such as your current address and phone number

Employment and employer information

Net worth and income information

Social Security Number or passport

ABA bank routing number and checking account number (typically found on a personal check or bank statement)

What if I change my mind about investing?

Until a closing occurs, you may cancel your investment at any time, for any reason. You will receive an email
when the closing occurs and your securities have been issued. If you have already funded your investment and your funds
are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.

After My Investment

How can I sell my securities in the future?

Currently there is no market or liquidity for these securities. Right now Digital Brands Group does not plan to
list these securities on a national exchange or another secondary market. At some point Digital Brands Group may
choose to do so, but until then you should plan to hold your investment for a significant period of time before a
“liquidation event” occurs. A “liquidation event” is when Digital Brands Group either lists their securities on an
exchange, is acquired, or goes bankrupt.

How do I keep track of this investment?

You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement.

Other General Questions

What is this page about?

This is Digital Brands Group's fundraising profile page, where you can find information that may be helpful
for you to make an investment decision in their company. The information on this page includes the company overview,
team bios, and the risks and disclosures related to this investment opportunity.
You will also find a copy of the Digital Brands Group's Offering Circular, which has been qualified by the SEC.
The Offering Circular includes important details about Digital Brands Group's fundraise that you should review
before investing.

What are the risks of this investment?

This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire
investment amount. In addition to these risks, you should carefully consider the specific information and risks
disclosed in Digital Brands Group’s profile and Offering Circular.

Check out the background of our broker-dealer and investment professionals on FINRA's broker/check.

This site is operated by SeedInvest Technology, LLC ("SeedInvest"), which is not a registered broker-dealer. SeedInvest does not give investment advice, endorsement, analysis or recommendations with respect to any securities. All securities listed here are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. SeedInvest has not taken any steps to verify the adequacy, accuracy or completeness of any information. Neither SeedInvest nor any of its officers, directors, agents and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy or completeness of any information on this site or the use of information on this site. By accessing this site and any pages thereof, you agree to be bound by the Terms of Use and Privacy Policy.

All securities-related activity is conducted by SI Securities, LLC ("SI Securities"), an affiliate of SeedInvest, and a registered broker-dealer, and member FINRA/SIPC, located at 116 W Houston, 6th Floor, New York, NY 10012. SI Securities does not make investment recommendations and no communication, through this website or in any other medium should be construed as a recommendation for any security offered on or off this investment platform. Equity crowdfunding investments in private placements, and start-up investments in particular, are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups. Companies seeking startup investments through equity crowdfunding tend to be in earlier stages of development and their business model, products and services may not yet be fully developed, operational or tested in the public marketplace. There is no guarantee that the stated valuation and other terms are accurate or in agreement with the market or industry valuations. Additionally, investors may receive illiquid and/or restricted stock that may be subject to holding period requirements and/or liquidity concerns. In the most sensible investment strategy for start-up investing, start-ups should only be part of your overall investment portfolio. Further, the start-up portion of your portfolio may include a balanced portfolio of different start-ups. Investments in startups are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

SI Securities does not provide custody services in connection any investments made through the platform. Customer securities and account balances, not held directly by the customer or in escrow, are held by Mainstar Trust Company (“Mainstar”) through New Direction IRA Inc. (“NDIRA”) as its agent and for the benefit of customers. Mainstar is an unaffiliated limited purpose trust company chartered under the laws of the State of Kansas. NDIRA is an unaffiliated Colorado corporation that is an agent of Mainstar and acts as administrator of customer accounts.